Report: Reform the goal of mortgage investigation

By Jessica M. Karmasek | Oct 13, 2011


WASHINGTON (Legal Newsline) - The state attorneys general who are negotiating a settlement with the nation's top five mortgage servicers apparently aren't stopping there.

A spokesman for Iowa Attorney General Tom Miller, who is leading the ongoing talks with the banks, says they plan on going after other lenders, too.

Geoff Greenwood told Fox Business on Thursday that the plan is to reform the entire industry.

The attorneys general, the U.S. Justice Department, Treasury Department and the new Consumer Financial Protection Bureau are currently negotiating a deal with lenders Bank of America Corp., Wells Fargo & Co., JPMorgan Chase & Co., Citigroup Inc. and Ally Financial Inc.

The probe began last October with inquiries into so-called "robosigning" practices by several mortgage companies, and has since broadened into identifying and addressing additional alleged improper foreclosure practices.

Greenwood said Wednesday that state and federal officials continue to meet with the banks and are "getting closer" to a deal. This week, they are meeting in Washington, he said.

And though sources at Citigroup and Bank of America have said the rumored $20 billion settlement is "imminent" and could be wrapped up this week or next, Greenwood said not quite.

"We are getting closer, but at this time I wouldn't characterize a deal as imminent," he said.

"I'd say we're likely, but not certain, to reach an agreement. I'm not sure how much longer it will take... we'll know more as we keep negotiating."

Greenwood said he couldn't go into much detail about the ongoing talks, but did note that there is no settlement at this point.

"We have taken on an enormous task and there are many, many moving parts. This is a case that focuses on homeowners, and we plan to limit the scope of the settlement to servicing and foreclosure abuses and practices," he said.

"We started a year ago with investigating robosigning and we will address robosigning practices. Most notably, we are trying to reform a dysfunctional servicing system and we have nearly finished working on this component of the negotiations."

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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